What is the perceived threat vector of BIP 300 / Drive Chains towards L1 mainchain BTC?
How does one replicate something that is Proof of Stake as an L2 on BTC?
Is a drivechain sidechain ever a an actual blockchain? Can it be? Or would all of this just be often chain side ledgers like Lightning?
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Checkout drivechain.info and search for projects from altcoins that have already been ported like eth and zcash.
so, yes to almost everything you said.
one threat vector that i feel is underappreciated is reputation of Bitcoin related to the insinuation that the sidechain coins are just as valuable. they arent.
Someone receiving drivechain1 sidechain coins need to withdraw/move to btc (3+ months) before spending in a normal transaction, or depositing into drivechain2 sidechain.
that lengthy withdraw process to btc, and incompatibility between sidechains is a form of encumberance and the value of that in a drivechain sidechain may be discounted accordingly.
people who experience bitcoin first by receiving in a drivechsib sidechain will understandably be upset about the lengthy time they need to commit to in order to transact on chain to even move those funds to traditional lightning channels for Bitcoin. this can cause reputational harm to bitcoin as it will be (has been) lumped together (affinity grift)
the faster way out will be some service offering to setup a swap for a fee. peer to peer may be viable, but in either event the liquidity of such trades will be low.
Why woulsn't people just use an atomic swap to instantly get mainchain coins if that's what they want?
two reasons...
1. it hasnt been built yet
2. the fee may not be desireable
You can compare it to submarine swaps on LN. Theres dozens of implementations of github and the market is perfectly efficient (since you don't have to trust the swap service) so the fees would be easily driven to zero by competition.
Do you believe a drivechain powered sidechain would have the liquidity of lightning to support this?
I think its possible with enough adoption, assuming rationale for demand but getting through an initial hurdle isnt guaranteed. Liquid suffers from this.
That's a good point. If the drivechain is tiny there probably wont be anyone willing to swap with you. But then, there wont be many people that need that either, haha
Also, remember that as the receiver you can just tell whoever is paying you what drivechain to use, no reason to use a zero liquidity chain.
That assumes the payer has options. Or the payer saying they can pay in Litecoin or Doge. Which of those would you prefer?
But on a more serious note, need to think of incentives. The natural preference is for Bitcoin, as it can be quickly moved into a drivechain sidechain if so desired
Very true, but that's exactly how it works now. Most people accept Bitcoin (maybe Bitcoin cash too lol, sometimes ethereum) a lot support lightning too. Some darknets only accept monero (in a drivechain future they might also accept zcash drivechain bitcoin).
Point is the reciever chooses.
I usually prefer merchants that accept lightning for the low fees and privacy, but if they don't accept lightning, I have yo go onchain. Incentives are aligned so that merchants accept payments so long as the amount they might earn on that rail outweighs the costs of supporting it (they can factor swap fees into the price for example).
